Sector Rotation

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Hi Dan and Matt,
Firstly, I want to say that I have really enjoyed your service so far and appreciate your recommended portfolios. However, as I go about building my own portfolio, I want to keep my portfolio size to roughly 3 – 5 stocks but ensure that my focus is on the strongest sector(s). Once I have established the strongest sector, I would purchase those shares that give me the ideal mix of income and growth. My technical analysis combined with your fundamental research makes this task pretty easy.
The hard part is establishing the strongest sector in our markets or the next area that is showing strength. I dont think that I am doing a bad job right now but always want to improve. Do you have any recommendations for how to do this reliably and if you recommend some further reading – i.e. a book or other blog that I can use to further my research. I know I am asking a big question here but any feedback that you could offer would be helpful.
Thank You,

Peter

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Asked on September 14, 2020 12:04 pm
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Hmmm, I'd be very reluctant to state that people are shifting out of the tech sector. In fact, I think this will be one of the more promising sectors moving forward, along with renewable energy, for a long time.

I think it LOOKS like people are shifting out because valuations got a tad too high. However, as you can see with our Bull List's (containing Constellation, Real Matters, Lightspeed, Docebo, OpenText and previously Shopify) we're very bullish on tech.

However, the renewable sector rotation is clearly happening. I think it's been happening for quite some time now, as oil and gas producers have generally been a horrible investment over the last 15 years.

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Posted by Dan Kent
Answered on September 15, 2020 8:36 am
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Thank You for the prompt reply Dan,

I guess I would consider myself as more of a medium term holder of my positions. I like your analagy of a bar of soap. I look at things on a monthly basis and usually only make any changes on a quarterly basis or even longer. A good example is the past 12 - 16 month strength that we have seen in technology where I have not changed anything for the past year. However, I am starting to think that there is a rotation out of that sector and am looking for the next growth opportunity (notwithstanding gold and silver). This is almost becoming an acedemic pursuit of mine (lol).
Thanks again, I love the material.
I look forward to your reply.
Peter

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Posted by Peter Banks
Answered on September 14, 2020 1:01 pm
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